After hitting a high of nearly 1.380000 in early trading yesterday and creating a potential target of 1.390000 for bullish speculators which was actually touched on the 1st of August, ADA/USD has reversed lower. Following in the footsteps of the broad cryptocurrency market, Cardano has certainly exhibited a rather solid bullish run higher since the 20th of July. However, the question speculators may now be worried about is if the move upwards is about to run out of power.
Crucial resistance levels remain unchallenged in the short term and ADA/USD’s sudden reversal lower may create nervous sentiment. Cardano has a habit of trading a step behind the broad cryptocurrency market and its reversal lower and test of short-term support levels is intriguing. This is because from a technical perspective, it appears ADA/USD is still above important short-term support levels, which may mean they will become targets if speculative selling increases.
If the 1.324000 support level fails to hold, it may set off a quick test of the 1.3200000 juncture. Yesterday’s trading was volatile, and before approaching the 1.380000 level and a high for the day, ADA/USD actually had seen a violent selling wave develop which traded below the 1.270000 mark and then reversed higher. The ability to move higher for ADA/USD will not be lost on speculative bulls who still favor buying positions as they wager on reversals upwards. However, the question is where the next cycle of selling pressure will conclude if it develops.
ADA/USD technically looks like it can traverse lower and test the 1.320000 to 1.310000 levels. The broad cryptocurrency market continues to display signs of short-term nervousness and if the major digital assets see further price erosion short term it may set off another wave of selling for ADA/USD.
Speculators who want to sell ADA/USD on slight moves higher may be making a logical speculative wager in the current market conditions. If market sentiment remains nervous, ADA/USD may prove to be overbought at its current values and a test of support levels may develop sooner rather than later. Traders should be sure to use risk management astutely because ADA/USD remains a volatile cryptocurrency to pursue.
Cardano Short-Term Outlook:
Current Resistance: 1.338000
Current Support: 1.324000
High Target: 1.363000
Low Target: 1.307000
